Rayovac 2013 Annual Report Download - page 108

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SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(Amounts in thousands, except per share figures)
connection with the refinancing, the Company recorded accelerated amortization of portions of the unamortized
discount and unamortized Debt issuance costs related to the former term loan facility totaling $5,485 as an
adjustment to Interest expense during Fiscal 2013.
On September 4, 2013, Spectrum Brands amended the senior term loan facility, issuing a tranche maturing
September 4, 2017, which provides for borrowings in an aggregate principal amount of $850,000, and a tranche
maturing September 4, 2019, which provides borrowings in an aggregate principal amount of $300,000, (together
with the HHI Term Loan, the “Term Loan”). The proceeds from the amendment were used to extinguish the
former 9.5% Notes, which were scheduled to mature on June 15, 2018, and for general corporate purposes. The
9.5% Notes had an outstanding amount of $950,000 prior to extinguishment.
The Term Loan contains financial covenants with respect to debt, including, but not limited to, a fixed
charge ratio. In addition, the Term Loan contains customary restrictive covenants, including, but not limited to,
restrictions on the Company’s ability to incur additional indebtedness, create liens, make investments or specified
payments, give guarantees, pay dividends, make capital expenditures and merge or acquire or sell assets.
Pursuant to a guarantee and collateral agreement, the Company, its domestic subsidiaries and its Canadian
subsidiaries have guaranteed their respective obligations under the Term Loan and related loan documents and
have pledged substantially all of their respective assets to secure such obligations. The Term Loan also provides
for customary events of default, including payment defaults and cross-defaults on other material indebtedness.
The HHI Term Loan was issued at a 1.0% discount and recorded net of the $8,000 discount incurred. The
discount is reflected as an adjustment to the carrying value of principal, and is being amortized with a
corresponding charge to interest expense over the remaining life of the debt. In connection with the issuance of
the HHI Term Loan, the Company recorded $19,328 of fees during Fiscal 2013, of which $16,907 are classified
as Debt issuance costs within the accompanying Consolidated Statements of Financial Position and is being
amortized as an adjustment to interest expense over the remaining life of the HHI Term Loan, with the remainder
of $2,421 reflected as an increase to Interest expense during Fiscal 2013.
The tranches related to the amendment of the Term Loan were issued at a .5% discount and recorded net of
the $5,750 discount incurred. The discount is reflected as an adjustment to the carrying value of principal, and is
being amortized with a corresponding charge to interest expense over the remaining life of the debt. In
connection with the amendment of the Term Loan, the Company recorded $16,381 of fees during Fiscal 2013
which are classified as Debt issuance costs within the accompanying Consolidated Statements of Financial
Position and is being amortized as an adjustment to interest expense over the remaining life of the Term Loan.
6.375% Notes and 6.625% Notes
On December 17, 2012, in connection with the acquisition of the HHI Business, Spectrum Brands assumed
$520,000 aggregate principal amount of 6.375% Notes at par value, due November 15, 2020 (the “6.375%
Notes”), and $570,000 aggregate principal amount of 6.625% Notes at par value, due November 15, 2022 (the
“6.625% Notes”), previously issued by Spectrum Brands Escrow Corporation. The 6.375% Notes and the
6.625% Notes are unsecured and guaranteed by Spectrum Brands’ parent company, SB/RH Holdings, LLC, as
well as by existing and future domestic restricted subsidiaries.
The Company may redeem all or a part of the 6.375% Notes and the 6.625% Notes, upon not less than 30 or
more than 60 days notice, at specified redemption prices. Further, the indenture governing the 6.375% Notes and
the 6.625% Notes (the “2020/22 Indenture”) requires the Company to make an offer, in cash, to repurchase all or
a portion of the applicable outstanding notes for a specified redemption price, including a redemption premium,
upon the occurrence of a change of control of the Company, as defined in such indenture.
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